Brazilian healthcare market 6 13-12

Is Brazil the Next Big Thing in HealthcareIs Brazil the Next Big Thing in Healthcare??

Complex Complex Brazilian Healthcare Market Poised for Brazilian Healthcare Market Poised for GrowthGrowth

Willian Fujioka, Industry Analyst

Healthcare

June 13, 2012June 13, 2012

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Today’s Presenter

Functional Expertise

• 7 years of market intelligence expertise within the pharmaceutical industry and Frost &

Sullivan. Particular expertise in:

- Conducting qualitative and quantitative primary market researches

- Creating and designing market reports and executive dashboards with secondary data

(sales and prescriptions)

- Developing competitive intelligence environment and analyzing business development

opportunities

- Planning and implementing datamining and business intelligence projects

Willian Fujioka

2

- Managing sales force effectiveness activities

Industry Expertise

• 7 years in the Healthcare sector, mainly:

- Cardiology

- Respiratory

- Dermatology

- Gynecology

- CNS

- Oncology

Willian FujiokaIndustry Analyst,

Healthcare

Frost & Sullivan

Latin America

São Paulo

Agenda

• Why is this a HUGE Growth Opportunity?

• Let’s understand what will build this outstanding

scenario = Let’s look beyond…

• ... the expansion of the C-class

• ... the non-branded generic drugs

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• ... the non-branded generic drugs

• ... the Brazilian Unified Health System (SUS)

• ... the premium hospitals

• ... hypertension and epidemics

• The key take-away

Why is this a HUGE Growth Opportunity?

Brazil has turned into a focus point globally…

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Why is this a HUGE Growth Opportunity?

… and when we look a little closer, Healthcare shines.

2015CAGR

2011-20152011

5

GDP1 $2.87 trillion

Sources: 1. IMF World Economic Outlook Database Apr 2012, GDP, current prices; 2. Frost & Sullivan analysis.

3.6%

Healthcare Market2

$52.30 billion 12.6%

$2.49 trillion

$32.50 billion

Let’s understand what will build this outstanding

scenario

Rise of the midde class

Emerging of Healthcare IT

Generics

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Healthcare IT

Heavy disease burden

Investments from

government

Generics

Let’s look beyond the expansion of the C-class

Economic Class 2003 2011 2014

A/B 13.3 22.5 29.1

C 65.9 105.4 118.0

D/E 96.2 63.5 48.9

Distribution of Population per Economic Class1, Brazil, 2003-2014

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31.8 33.7 35.0 37.0 38.8 40.8 42.145.7 47.6

18.0% 18.8% 19.0% 19.8% 20.5% 21.5% 22.0% 24.0% 25.0%

0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%

0.0

10.0

20.0

30.0

40.0

50.0

2003 2004 2005 2006 2007 2008 2009 2010 2011

Tota

l p

op

ula

tio

n c

ov

era

ge

rate

Insu

red

pe

op

le (

Mil

lio

ns)

Number of Insured People and Total Population Coverage Rate2, Brazil, 2003-2011

Sources: 1. FGV; 2. ANS.

Let’s look beyond the non-branded generic drugs

Pharma and

Non-branded generics

Biosimilars: recent and Branded

Other segments

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Pharma and Biotech

recent and upcoming regulation

Blockbusters’ patent

expiries

Branded generics

segments

Low-cost versions with similar value:

easier to use/maintain,

produced locally etc.

Let’s look beyond SUS

SUS: Brazilian Unified Health System

• Based on the Federal Constitution’s principles of health, which consider healthcare to be a

citizen’s right and the state’s duty.

• Central purpose: to provide universal, integrated, and egalitarian access to high-quality

healthcare.

• The policy-making comprises executive bodies, social participation and intermanagerial

committees – in federal, state and municipal levels.

“Popular Pharmacy”

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“Popular Pharmacy”

• Up to 90% reimbursement from government to pharmacies, for drugs that treat +10 chronic diseases.

• 100% reimbursement for hypertension, diabetes and asthma (just included).

Multiannual Plan (2012-2015), from Ministry of Planning

• Main objective: Expansion, Development and Improvement of SUS

• $175.96 billion budget

Investment Program for Health Industrial Complex, from Ministry of Health

• Main objective: Create 20 PPPs with technology transfers to produce locally biosimilars and medical devices

• $1.11 billion budget

Let’s look beyond the premium hospitals

Emerging of Healthcare

Overall pressure for more

productivity in hospitals

Aggressive expansion of big private groups

Modernization of public

infrastructure

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Healthcare IT

Boom of smartphones and tablets:

m-Health

Internationalaccreditation certificates

National Plan for Universal

Broadband Connection

Medical

Tourism

Let’s look beyond hypertension and epidemics

Health of mothers and children

Maternal mortality Slow decline

Preterm delivery Increasing

Infectious diseases

Dengue Seasonal epidemics

Visceral leishmaniasis Increasing

Non-communicable diseases

Main Trends for Top Health Disorders and Causes of Death1, Brazil, 2011–2015

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Non-communicable diseases

Overweight/obesity Rapid increase

Diabetes Increase

Hypertension High prevalence, still increasing

Psychiatric diseases High prevalence

Asthma High prevalence

Cancers of the breast, lung, prostate, and colon Increasing

Tobacco use Declining but still at unacceptable levels

Excessive use of alcohol Declining but still at unacceptable levels

More than 2.0 million new cancer cases2 are expected by 2015

Sources: 1. Lancet; 2. INCA.

The key take-away

Yes, Brazil is a big thing in Healthcare, with opportunities for all

segments and not only current players in Healthcare industry.

• Local Companies

• Multinational

Companies

Pharma and Biotech

Medical Devices

Specific

Drivers

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Companies

• Healthcare

Players

• Non-Healthcare

Players

Medical Devices

Healthcare IT

Medical Imaging

Clinical Diagnostics

Overall

DriversOpportunities

Specific

Drivers

Specific

Drivers

Specific

Drivers

Next Steps

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